House Building Advance (HBA) in Railway: Comprehensive Guide for Central Government Employees

The House Building Advance (HBA) is a financial assistance scheme designed to help Central Government employees, including those in the Railways, purchase, construct, or extend their residential properties. Managed by the Ministry of Housing and Urban Affairs (MoHUA), this scheme provides critical support to employees in realizing their homeownership goals.

What is HBA in Railway?

The House Building Advance (HBA) in Railway is available to railway employees who meet the prescribed eligibility criteria. Similar to other Central Government employees, railway staff can avail this benefit for:

• Construction of a New House on land owned by the employee.
• Purchase and Construction of Property through government schemes in cities like Delhi, Bangalore, and Lucknow.
• Co-operative Housing Schemes: Acquisition of plots and building homes via housing societies.
• Ready House/Flat Purchase from housing boards and registered developers.
• Extension of Existing House: Adding to an already owned property.
• Repayment of Existing Loans: Repaying loans taken from the Government or HUDCO.

Eligibility Criteria for House Building Advance (HBA) in Railway

To qualify for HBA, railway employees must meet the following eligibility requirements:

• Permanent Central Government Employees, including those in the railway sector.
• Employees with at least 5 years of continuous service and those not holding permanent state government appointments.
• Spouses: If both spouses are Central Government employees, they can apply for HBA jointly or separately.

HBA Maximum Limit for Railway Employees

The maximum limit for HBA in railway is determined by the employee’s basic pay. The cost of the house (excluding land) must not exceed:

• 139 times basic pay, with a ceiling of up to ₹1.00 crore.
• For exceptional cases, a relaxation of up to 25% may be allowed.

HBA Amount Limits for Railway Employees

1. General Limits for Railway Employees:

   • Construction/Purchase of New House/Flat: Maximum of ₹25 lakhs or up to 34 months of basic salary.
   • Extension of Existing House: Maximum of ₹10 lakhs or up to 34 months of basic salary.

2. Rural Areas:

   • The advance may be 80% of the actual cost, or 100% if the property is within the town’s periphery.

Repayment Capacity for HBA in Railway

The amount of the loan is calculated based on the employee’s years to retirement:

• 20 years to retirement: Up to 40% of basic pay.
• 10-20 years to retirement: Up to 40% of basic pay, plus 65% of DCR gratuity.
• Less than 10 years to retirement: Up to 75% of basic pay, with adjustments from DCR gratuity.

HBA Interest Rate and Recovery Terms

• Interest Rate: The rate is set at 8.50% from FY 2017-18 and is reviewed every three years.
• Recovery of HBA:
  • Principal repayment: In 180 monthly installments (over 15 years).
  • Interest repayment: In 60 installments (over the next 5 years).
• If interest rates change, the new rates will apply for subsequent installments.

Disbursement Procedures for HBA in Railway

Disbursement of the HBA amount follows these procedures:

1. Ready House Purchase: A lump sum payment is made upon contract execution. The house must be purchased and mortgaged within 3 months.
2. New Flat/House Construction: The payment can be made in lump sum or installments, provided the agreement is executed before the first installment.
3. Extension of Existing House: Paid in two installments (first after mortgage, second after reaching the plinth level).

Mortgage and Second Charge in HBA for Railway Employees

• First Charge: The property is mortgaged to the President of India.
• Second Charge: Allowed with a No Objection Certificate (NOC) if the employee requires additional loans.

Insurance Requirement for HBA in Railway

The property must be insured against fire, flood, and lightning by recognized institutions. The employee must ensure annual renewal of the policy and submit premium receipts. A penal interest of 2% above the prevailing rate is charged for any uninsured periods.

Key Takeaways: House Building Allowance in Railway

• HBA Maximum Limit: ₹25 lakhs for new house construction or purchase, and ₹10 lakhs for extending an existing house.
• House Building Allowance in Railway: Railway employees can avail the same HBA benefits as other Central Government employees, subject to the prescribed eligibility and conditions.
• Repayment and Interest: The loan is repaid over 15 years with 8.50% interest, reviewed every three years.

Conclusion

The House Building Advance in Railway offers significant financial support to railway employees seeking to own or improve their homes. By adhering to the rules regarding eligibility, cost limits, and repayment conditions, railway employees can effectively utilize this benefit for their housing needs.

For more details, consult the MoHUA guidelines or your respective railway department for specific procedural instructions.

Reference → MoHUA Office Memorandum I.17011/11(4)12016-H-III (House Building Advance Rules (HBA) – 2017)

Read Also ⇓

• NPS Central Government Schemes: SBIPF, LICPF, UTIPF Performance, Returns, and Top Holdings
• Dearness Allowance of Central Government Employees during COVID-19
• Amendment to Training Period for Technician Category (RBE No. 92/2024)
• Revised Training Period for Technician Category – Compassionate Ground Appointees (CGA)
• Entitlement on Resignation from Railway Service for Employees Under the National Pension System (NPS)
• Re-engagement of Retired Railway Staff on Contract Basis – Railway Board Order RBE No. 96/2024
• Re-engagement of Retired Railway Staff on Contract Basis – Revised Guidelines (RBE No. – 115/2024)
• Special Casual Leave (SCL) for Blood Donation and Apheresis Donation – Updated Guidelines for Government Employees
• Paternity Leave Rules For Male Railway Employees 
• Child Adoption Leave and Paternity Leave for Railway Employees